Italian hot roll contracts reached as high as €650 ($708) per ton ex-works, with producers demanding €670-680 per ton ex-works. These increases are expected to lead to a rapid increase in producers' January orders.
In the coming first quarter, available quotas are expected to tighten as rolling mills in Europe will receive material from some Asian countries. This means that buyers will have to pay tariffs in January if they import above quota levels.
Steel offers from Asian countries such as Vietnam, Korea and Japan include limited quotas for European buyers, giving priority to domestic and neighboring markets. The cost of Turkish material is considered high and India cannot meet all European needs. Hot rolled steel (HRC) offers from Asia currently stand at €630-650/ton CFR Europe.
In the light of low supply and strong demand, European steelmakers are preparing to set delivery prices at €700 per tonne. However, the market is still fragile and service centers report that their customers are experiencing continued weakness in consumption.
In light of these developments, at least one more round of hikes is expected in the market in the coming first quarter.
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